Long-term thinking Prudential plc Fact File 2015

Transcription

1 Long-term thinking Prudential plc Fact File 2015

2 Prudential plc Annual Report 2013 Prudential plc Annual Report 2014 Prudential plc Annual Report 2013 Prudential plc Annual Report 2014 HK Stock Code: 2378 Long-term thinking Long-term thinking HK Stock Code: 2378 View our full annual report online

3 Prudential plc Fact File Delivering long-term value Prudential delivered a strong, broad-based performance in Our core strategy of focusing on the three main opportunities available to us in Asia, the US and the UK serving the protection and investment needs of the growing middle class in Asia, providing income in retirement to American baby boomers and meeting the financial needs of an ageing British population is unchanged. It continues to serve us well. The execution of this strategy, driven by the operating principles set out in 2009, is central to the Group s continued success and reflects the dedication and quality of our people and their focus on meeting the distinct needs of our customers across the business. This has been one of the key factors enabling us to outperform in the markets in which we compete, delivering value for our customers and sustainable returns for our shareholders. Creating value Customers 24m life customers worldwide Investors 173% total shareholders return 1 achieved since 2010 Employees 23,047 employees worldwide Societies Note 1 Total shareholders return represents the growth in the value of a share plus the value of dividends paid, assuming that the dividends are reinvested in the Company s shares on the ex-dividend date. 19.6m total community investment spend

4 02 Prudential plc Fact File 2015 Our world Prudential plc is an international financial services group serving around 24 million insurance customers and with 496 billion of assets under management. We are listed on stock exchanges in London, Hong Kong, Singapore and New York. % of GDP growth* Prudential life business footprint (63%) Rest of world (37%) US$13.9 trillion global growth * IMF World Economic Outlook October 2014 United States United Kingdom The US baby boomer generation is the wealthiest demographic group in the global economy. Over the next 20 years they will be retiring at a rate of 10,000 per day, creating significant demand for retirement services. The UK has an ageing population and a savings gap, that is unsustainable over the long term. This will drive increasing demand for savings products and retirement income solutions. Find out more about Jackson page 09 Find out more about Prudential UK & Europe page 10

5 Prudential plc Fact File m life customers worldwide 4 stock exchange listings 496bn assets under management 166 years of providing financial security Asset management Asia Europe is home to the second-largest retail asset management industry in the world, with over 6.2 trillion of assets. Asset managers with trusted brands and superior investment performance will see increasing demand for their products. The Asian middle class population is forecast to double between 2009 and 2020 and will by then represent over half of the global middle class. This group is getting wealthier and will have significant and growing needs for protection against illness and accident. Find out more about M&G page 11 Find out more about Prudential Corporation Asia page 08

6 04 Prudential plc Fact File 2015 Our strategy and operating principles Our strategy is designed to create sustainable economic value for our customers and our shareholders. It is focused on three long-term opportunities: The significant protection gap and investment needs of the Asian middle class; The transition of US baby boomers into retirement; and The UK savings gap and ageing population in need of returns and income. Balanced metrics and disclosures Asia: accelerate United States: build on strength Disciplined capital allocation Focus on customers & distribution Sustainable value for our stakeholders Proactive risk management Asset management: optimise focus United Kingdom: Our strategy is underpinned by a set of key operating principles Focus on customers and distribution We believe that in order to do well for our shareholders we must first do good for our customers. Hence, customers are at the centre of our operating principles. Our products are designed to provide peace of mind, whether that be in relation to saving for retirement or insuring against the risks of illness, death or critical life events. Satisfied customers are a key driver of our growth as they become our advocates, recommending our products and services. Distribution plays a key role in our ability to reach, attract and retain these valued customers across our regions. Building and diversifying our distribution capabilities will help ensure that we fully capitalise on the opportunities available to us in each of our regions. Balanced metrics and disclosures We aim to have clarity and consistency internally and externally in the performance indicators that drive our businesses. Alongside this we develop our financial disclosures to enable our stakeholders to fairly assess our long-term performance. We have three objectives: To demonstrate how we generate profits under the different accounting regimes; To show how we think about capital allocation via measures that highlight the returns we generate on capital invested in new business, including internal rates of return, payback periods and new business profitability; and To highlight the cash generation of our business. Disciplined capital allocation We rigorously allocate capital to the highest-return products and geographical locations with the shortest payback periods, in line with our risk appetite. This has had a positive and significant impact. Over the last five years, our new business profits have increased by 48 per cent (on an actual exchange rate basis) even though we invested 6 per cent less capital. This has, in turn, transformed the capital dynamics of our Group: for example, the free capital generated from our existing life and asset management operations reached 3.2 billion in 2014 compared to 2.3 billion five years ago (on an actual exchange rate basis). This transformation enabled our business operations to remit 1,482 million to the Group in 2014, nearly double the level of remittance five years ago. Proactive risk management Balance sheet strength and proactive risk management enable us to make good our promises to customers and are therefore key drivers of long-term value creation and relative performance. We have continuously strengthened our capital position since 2008, in spite of the challenging macroeconomic environment. Management actions that have been taken include: The sale of our capitalintensive Taiwan agency business in 2009, improving our IGD capital position; The establishment of 2.2 billion of credit default reserves 1 in the UK annuity business; and Controlling sales of US variable annuities in a manner which appropriately balances value, volume, capital generation and balance sheet risk. Notes 1 On a Statutory (Pillar 1) basis. 2 Total shareholders return represents the growth in the value of a share plus the value of dividends paid, assuming that the dividends are reinvested in the Company s shares on the ex-dividend date.

7 Prudential plc Fact File How our business works We provide protection and savings opportunities to our customers, social and economic benefits to the communities in which we operate, jobs and opportunities to our employees, and long-term value for our investors. By offering security, pooling savings and making investments, we help to drive the cycle of growth. What we do and how we do it Life insurance Prudential provides savings, protection and retirement products, which offer security for individuals and benefit societies Markets Operate in markets with suitable demographics and opportunities Asset management Prudential helps customers to grow and protect their savings and investments Markets Operate in suitable markets and identify investment opportunities with attractive risk-return profile Products Design products that meet our customers savings, income and protection needs Brands and distribution Develop trusted brands and effective distribution channels that enable us to better understand and service customers financial needs Leverage asset management capabilities to generate value for our customers and shareholders Products Offer valued and innovative products underpinned by good investment performance Brands and distribution Trusted brands, market span and strong distribution links help us to attract new monies and retain existing assets Customers Invest customers savings in a way that reflects their personal needs and risk tolerance. Provide financial protection to customers for adverse events Customers Generate valuable returns for our customers through good investment performance Shareholders Generate value for shareholders through being rewarded for managing customers savings and through insurance profits from the protection given to policyholders Shareholders Generate value for shareholders through fee income from managing growing funds under management Delivering for our stakeholders We create financial benefits for our investors and deliver economic and social benefits for our customers, employees and societies in which we operate Customers Providing financial security and wealth creation 24m life customers worldwide Investors Growing dividends and share price performance enhances shareholder value 173% total shareholders return 2 achieved since 2010 Employees Providing an environment with equal opportunities, career potential and reward means that we have the best people to deliver our strategy 23,047 employees worldwide Societies Supporting societies where we operate, through investment in business and infrastructure, tax revenues and community support activities 19.6m total community investment spend

8 06 Prudential plc Fact File 2015 Measuring our performance To create sustainable economic value for our shareholders we focus on delivering growth and cash while maintaining appropriate capital. Profit, cash and capital What we measure and why IFRS operating profit ( m) IFRS operating profit is our primary measure of profitability. This measure of profitability provides an underlying operating result based on longer-term investment returns and excludes non-operating items. Performance 1 1,823 2,017 CAGR +15% 2,520 2,954 3,186 Commentary Group IFRS operating profit in 2014 increased by 14 per cent on a constant exchange rate basis (8 per cent on an actual exchange rate basis), compared to 2013, reflecting strong growth in Asia and the US. IFRS operating profit in both business units was up 17 per cent, on a constant exchange rate basis. EEV new business profit 2 ( m) Life insurance products are, by their nature, long term and generate profit over a significant number of years. Embedded value reporting provides investors with a measure of the future profits streams of the Group. EEV new business profit reflects the value of future profit streams which are not fully captured in the year of sale under IFRS reporting. 1,433 1,536 CAGR +10% 1,791 2,082 2,126 EEV new business profit in 2014 increased by 10 per cent on a constant exchange rate basis (2 per cent on an actual exchange rate basis), compared to 2013, driven by a combination of higher volumes and pricing and product actions to increase profitability. EEV operating profit 2 ( m) EEV operating profit is provided as an additional measure of profitability. This measure includes EEV new business profit, the change in the value of the Group s long-term in-force business, and profit from our asset management and other businesses. As with IFRS, EEV operating profit reflects the underlying results based on longer-term investment returns. 2,868 2,937 CAGR +9% 3,174 4,204 4,096 Group EEV operating profit in 2014 increased by 4 per cent on a constant exchange rate basis (decreased 3 per cent on an actual exchange rate basis), compared to 2013, reflecting higher new business profits and higher contributions from the in-force business. Notes 1 The comparative results shown above have been prepared using actual exchange rates (AER) basis except where otherwise stated. CAGR is Compound Annual Growth Rate. 2 The 2014 EEV results of the Group are presented on a post-tax basis, and accordingly, prior years results are shown on a comparable basis.

9 Prudential plc Fact File What we measure and why Group free surplus generation 3 ( m) Free surplus generation is used to measure the internal cash generation of our business units. For insurance operations it represents amounts maturing from the in-force business during the period less investment in new business and excludes other non-operating items. For asset management it equates to post-tax IFRS operating profit for the period. Performance 1 Commentary 1,687 CAGR +11% 1,982 2,080 2,462 2,579 Underlying free surplus in 2014 increased by 9 per cent, on a constant exchange rate basis (5 per cent on an actual exchange rate basis), compared to 2013, driven by growth of the in-force portfolio, and continued discipline in the investments made to support new business growth. Business unit remittances ( m) Remittances measure the cash transferred from business units to the Group. Cash flows across the Group reflect our aim of achieving a balance between ensuring sufficient net remittances from business units to cover the dividend (after corporate costs) and the use of cash for reinvestment in profitable opportunities available to the Group ,105 CAGR +12% 1,200 1,341 1,482 Business unit remittances increased by 11 per cent in 2014, compared to 2013, with higher contributions from the US and M&G. IGD capital surplus before final dividend 4 ( bn) Prudential is subject to the capital adequacy requirements of the European Union IGD as implemented by the Prudential Regulation Authority in the UK. The IGD capital surplus represents the aggregated surplus capital (on a Prudential Regulation Authority consistent basis) of the Group s regulated subsidiaries less the Group s borrowings 5. No diversification benefit is recognised We operate with a strong solvency position, with our estimated IGD capital surplus after funding the fees paid for renewing our exclusive distribution agreement with Standard Chartered Bank until 2029 and before final dividend covering the capital requirements 2.4 times. 3 Free surplus generation represents underlying free surplus based on operating movements, including the general insurance commission earned during the period and excludes market movements, foreign exchange, capital movements, shareholders other income and expenditure and centrally arising restructuring and Solvency II implementation costs. In addition, following its reclassification as held for sale, operating results exclude the result of the Japan Life insurance business. 4 Estimated. 5 Excludes subordinated debt issues that qualify as capital. For full information on our performance, see the Prudential plc Annual Report 2014.

10 08 Prudential plc Fact File 2015 Our businesses and their performance Asia: accelerate Prudential is a leading international life insurer in Asia with operations in 14 markets, serving the emerging middle class families of the region s outperforming economies. We have built a high-performing business with effective multichannel distribution, a product portfolio centred on regular savings and protection, award-winning customer services and a well-respected brand. Performance highlights New business profit 1 m Total IFRS operating profit m Net cash remittances m ,139 1, * 1, ,140 Eastspring Investments funds under management bn Continued delivery across key value creation metrics. On a constant exchange rate basis, new business profit up 13 per cent, IFRS profits up 17 per cent, free surplus generation up 14 per cent Increased agency 2 active manpower, up 6 per cent and improved productivity, up 12 per cent Renewed our long-standing distribution partnership with Standard Chartered Bank for a further 15 years and delivered APE growth of 20 per cent Delivered record third-party net in-flows at Eastspring Investments and won multiple industry awards Notes 1 The 2014 EEV results of the Group are presented on a post-tax basis and, accordingly, prior years results are shown on a comparable basis. 2 Agency excluding India. * Gain on sale of China Life Insurance Company in Taiwan.

11 Prudential plc Fact File United States: build on strength Jackson is one of the largest life insurance companies in the US, providing retirement savings and income solutions aimed at the 77 million baby boomers. Founded over 50 years ago, Jackson has a long and successful record of providing advisers with the products, tools and support to design effective retirement solutions for their clients. Performance highlights New business profit 1 m IFRS operating profit m Net cash remittances m * ,003 1,302 1,443 Growth in statutory admitted assets US$bn Cash remittance increased by 41 per cent to a record level of 415 million Continued strong returns on shareholder capital across all key financial metrics Elite Access sales of 3,108 million in the second full year after launch, making Jackson the most successful player in the non-guarantee variable annuity market Successfully managed sales of variable annuities with guarantees in line with risk appetite Awarded World Class Certification by Service Quality Measurement Group, Inc. and Highest Customer Satisfaction by Industry award the ninth consecutive year of recognition for customer service performance in these two categories Notes 1 The 2014 EEV results of the Group are presented on a post-tax basis and, accordingly, prior years results are shown on a comparable basis. * One-off release of excess surplus.

12 10 Prudential plc Fact File 2015 Our businesses and their performance continued United Kingdom: focus Prudential UK is a longestablished leading provider of life and pensions, with a relentless focus on the needs of the age cohorts where wealth is most heavily concentrated. Our core strengths in with-profits and retirement are underpinned by our expertise in areas such as longevity, risk management and multi-asset investment, together with our financial strength and highly respected brand. Performance highlights New business profit 1 m IFRS operating profit m Net cash remittances m 120 * Retail Wholesale Wholesale Retail Inherited estate bn Notes 1 The 2014 EEV results of the Group are presented on a post-tax basis and, accordingly, prior years results are shown on a comparable basis. 2 Financial Adviser Service Awards. * One-off release of excess surplus. ** After the effect of completing the domestication of the Hong Kong branch of the PAC with-profits fund * * Retail Wholesale Two five star ratings for excellent service 2, achieved for fourth consecutive year Outstanding Achievement Award for continuous customer-service excellence FT Adviser Online Outstanding Achievement Award 2014 Robust performance despite significant regulatory change impacting retirement income market Diversified distribution model focusing on intermediaries, Prudential Financial Planning (our direct advice service) and individual customers via mail, and telephone Continued strong performance of with profits, in particular PruFund Product innovation to meet changing face of UK retirement market Strong growth across investment products

13 Prudential plc Fact File Asset management: optimise M&G has been investing money for individual and institutional clients for over 80 years. M&G has grown to be one of Europe s largest retail and institutional fund managers by developing its enduring expertise in active investment. M&G has a conviction-led and long-term approach to investment, developing a deep understanding of the companies and organisations in whose equities, bonds or property M&G invests. Performance highlights M&G external net flows bn * 7.9 Net cash remittances m Institutional Retail M&G European retail funds under management bn IFRS operating profit 1 m Record external funds under management of 137 billion 34 per cent growth in European retail funds to 31.8 billion under management Record 2014 profits of 446 million Recognised for its investment performance with numerous awards, including Real Estate Manager and Fixed Income Manager of the Year at the Financial News Awards 2014 for the second consecutive year Notes 1 Excludes Prudential Capital. * Including 7.6 billion mandate.

14 12 Prudential plc Fact File 2015 Corporate responsibility Helping build strong communities Our corporate responsibility strategy Serving our customers We aim to provide fair and transparent products that meet our customers needs Serving our customers Valuing our people Long-term sustainable value Supporting local communities Protecting the environment Supporting local communities We seek to make a positive contribution to our communities through long-term partnerships with charitable organisations that make a real difference Our long-term sustainable approach to business is reinforced by our Group-wide corporate responsibility strategy. While we believe that corporate responsibility is best managed on the ground by those closest to the customer and local stakeholders, our Group approach is underpinned by four global themes: Serving our customers; Valuing our people; Supporting local communities; and Protecting the environment. Valuing our people We aspire to retain and develop highly engaged employees Protecting the environment We take responsibility for the environment in which we operate Performance highlights 19.6m total community investment 170,000 children in Asia supported to read over three years through First Read programme 62,309 hours volunteered by employees across the Prudential Group 518,101 donated by employees through payroll giving across the Group View our full corporate responsibility report online

15 Prudential plc Fact File Serving our customers In each of our businesses, we are focused on providing for a distinct set of customers needs: the significant and growing demand for saving and protection of the middle class in Asia; the retirement income requirements of baby boomers in the US; and the financial needs of the UK s ageing population, which needs both to save more and to access secure income in retirement. We want our customers to stay with us for the long term. This means we must listen to them to understand and respond to their changing needs, and maintain their trust in us with fair, transparent products and services highlights Prudential Hong Kong introduced PRUmyhealth cancer protector, a lifetime guaranteed renewable cancer protection plan. Prudential Assurance Malaysia Berhad introduced PRUcancer plan, a first-of-its-kind cancer plan in the market, where underwriting is based on cancer risk only. Prudential Vietnam Life introduced a new personal accident insurance product called Phu-Tam An, a comprehensive protection solution with wide coverage against all accidental risks. Prudential UK retained its two five star ratings in the Financial Adviser Service Awards for the fourth year running in the Life and Pensions, and Investments categories and was presented with an outstanding achievement award. Valuing our people We foster an environment in which our people find value and meaning in their work, and deliver outstanding performance for our customers, shareholders and communities. This is achieved through our continued focus on diversity and inclusion, talent development, employee engagement, and performance and reward highlights Prudential Singapore won the 2014 Asia s Best Employer award, and an award for Leading HR Practices in Quality Work-Life from Asia Pacific HRM. M&G was again voted by employees as one of the four best places to work in the City by the website Here is the City News. Supporting local communities Our community programmes are grouped around the broad theme of Strong foundations. This reflects our focus on helping communities establish those fundamental building blocks essential for their long-term futures. Our three building blocks represent areas of primary need: education and life skills; disaster readiness and relief; and wellbeing and protection highlights Employees across the Group gave 62,309 hours of volunteering in their communities. More than 6,000 employees volunteered through Prudential s flagship international programme, the Chairman s Challenge. The Group spent 19.6 million supporting community activities (up 5.7 per cent from 2013). Direct cash donations to charitable organisations amounted to 15.9 million. The Prudence Foundation, in partnership with National Geographic Channel and endorsed by the International Federation of Red Cross and Red Crescent Societies, launched Safe Steps, a pan-asian public service initiative to enhance disaster preparedness and awareness. The Prudence Foundation arranged for two Prudential regional volunteers programmes to help build new homes on Bantayan Island following Typhoon Haiyan. Cha-Ching, Prudential s multi-media financial literacy programme, began airing in Korea. Prudential introduced a scholarship programme for senior high school students in Ghana, and established the Prudential Actuarial Support System (PASS) awards for actuarial science in two Ghanaian universities. In response to the Ebola crisis in West Africa and to support international efforts in containing the outbreak, Prudential made significant donations to Médecins sans Frontières and Save the Children. 80,000 cyclists took part in Prudential RideLondon, and the event raised 10 million for charities. Protecting the environment The management of environmental issues is an integral part of managing the total risks faced by our business. Part of our strategy to mitigate against climate change includes measuring, reporting and improving the environmental performance of our global operations; investing in the low-carbon economy; and improving the indirect environmental impacts as an asset owner highlights Prudential was recognised as a leader by the Carbon Disclosure Project for the depth and quality of our climate change disclosure to investors, and was awarded a position on the FTSE 350 Climate Disclosure Leadership Index. Prudential was re-certified for ISO by the British Standards Institute, and commended for its performance. M&G Real Estate reduced global energy consumption and carbon emissions by 6 per cent at properties held consistently for two years; achieved three Green Stars in the Global Real Estate Sustainability Benchmark survey in recognition of its market-leading performance; and ensured that more than 1,000,000m 2 of floor space now has environmental certification, providing independent verification of its performance.

16 14 Prudential plc Fact File 2015 History Providing financial security since 1848 Successive generations have looked to Prudential to safeguard their financial security from industrial workers and their families in Victorian Britain to around 24 million insurance customers worldwide today. Our financial strength, heritage, prudence and focus on our customers long-term needs ensure that people continue to turn to our trusted brands to help them plan for today and tomorrow. Prudential s founding values of integrity, security and prudence are still central to our culture, while we also take the initiative to capture new opportunities Prudential is established as Prudential Mutual Assurance Investment and Loan Association in Hatton Garden, London, offering loans and life assurance to professional people Prudential opens the Industrial Department to sell a new type of insurance, Industrial Insurance, to the working classes, for premiums of a penny and upwards The Company becomes one of the first in the City to employ women. Calculating machines are also introduced, saving time processing an increasing volume of business Prudential moves into Holborn Bars, a purpose-built office complex designed by Alfred Waterhouse. The building becomes a London landmark, and remains an integral part of Prudential s property portfolio to this day Following the National Insurance Act, Prudential works with the government to run Approved Societies, providing sickness and unemployment benefits to five million people Prudential s first overseas life branch is established in India, with the first policy being sold to a tea planter in Assam Prudential shares are floated on the London Stock Exchange M&G launches the first unit trust in Britain, the First British Fixed Trust, investing in the shares of 24 leading companies The Man from the Pru advertising campaign is launched The first offices of Jackson National Life Insurance Company (Jackson) are opened in Jackson, Michigan Prudential Corporation is formed as a holding company to facilitate more flexible management of Prudential s diverse interests Prudential acquires Jackson in the United States. Prudence is relaunched as a modern brand image for the Group Prudential Corporation Asia is formed in Hong Kong as a regional head office to expand operations beyond an existing presence in Malaysia, Singapore and Hong Kong, to include value-creating opportunities in the region s many high-potential markets.

17 Prudential plc Fact File Prudential launches a mutual fund business in India in partnership with ICICI Bank Prudential acquires M&G, pioneer of unit trusts in the UK and a leading provider of investment products Prudential plc is listed on the New York Stock Exchange. Prudential becomes the first UK life insurer to enter the mainland China market through its joint venture with CITIC Group. ICICI Prudential Life Insurance launches in India Prudential extends and expands its long-term bancassurance alliance with Standard Chartered Bank Prudential s first dedicated Islamic asset management business, Prudential Al-Wara Asset Management Berhad, launches in Malaysia Prudential plc is listed on stock exchanges in Hong Kong and Singapore. Prudential enters into a long-term strategic bancassurance partnership with United Overseas Bank Limited (UOB) to distribute Prudential s products across Singapore, Indonesia and Thailand Prudential s Asia fund management business is rebranded as Eastspring Investments Prudential Polska is launched in Poland Prudential acquires businesses in Ghana and Kenya, marking its entry into the fast-growing African life insurance industry. Opposite page: Deed of Settlement, Left: Elevation of Holborn Bars by Alfred Waterhouse, Middle: Prudential Annual Dinner programme, Above: Publicity poster, 1958.

18 16 Prudential plc Fact File 2015 How to contact us Prudential plc Laurence Pountney Hill London EC4R 0HH Tel +44 (0) Media enquiries Tel +44 (0) Prudential Corporation Asia 13th Floor One International Finance Centre 1 Harbour View Street Central Hong Kong Tel Jackson National Life Insurance Company 1 Corporate Way Lansing Michigan USA Tel Prudential UK & Europe 3 Sheldon Square London W2 6PR Tel +44 (0) M&G Laurence Pountney Hill London EC4R 0HH Tel +44 (0) Institutional Analyst and Investor enquiries Tel +44 (0) investor.relations@prudential.co.uk UK Register Private Shareholder enquiries Tel: International shareholders Tel +44 (0) Irish Branch Register Private Shareholder enquiries Tel Hong Kong Branch Register Private Shareholder enquiries Tel US American Depository Receipts Holder enquiries Tel The Central Depository (Pte) Limited Shareholder enquiries Tel Forward-looking statements This document may contain forward-looking statements with respect to certain of Prudential s plans and its goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements that are not historical facts, including statements about Prudential s beliefs and expectations, and including, without limitation, statements containing the words may, will, should, continue, aims, estimates, projects, believes, intends, expects, plans, seeks and anticipates, and words of similar meaning, are forward-looking statements. These statements are based on plans, estimates and projections as at the time they are made, and therefore undue reliance should not be placed on them. By their nature, all forward-looking statements involve risk and uncertainty. A number of important factors could cause Prudential s actual future financial condition or performance or other indicated results to differ materially from those indicated in any forward-looking statement. Such factors include, but are not limited to, future market conditions, including fluctuations in interest rates and exchange rates and the potential for a sustained low-interest rate environment, and the performance of financial markets generally; the policies and actions of regulatory authorities, including, for example, new government initiatives related to the financial crisis and the effect of the European Union s Solvency II requirements on Prudential s capital maintenance requirements; the impact of continuing designation as a Global Systemically Important Insurer or G-SII ; the impact of competition, economic growth, inflation, and deflation; experience in particular with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; the impact of changes in capital, solvency standards, accounting standards or relevant regulatory frameworks, and tax and other legislation and regulations in the jurisdictions in which Prudential and its affiliates operate; and the impact of legal actions and disputes. These and other important factors may, for example, result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits. Further discussion of these and other important factors that could cause Prudential s actual future financial condition or performance or other indicated results to differ, possibly materially, from those anticipated in Prudential s forward-looking statements can be found under the Risk factors heading of Prudential s most recent Annual Report and the Risk factors heading of Prudential s most recent Annual Report on Form 20-F filed with the US Securities and Exchange Commission, as well as under the Risk factors heading of any subsequent Prudential Half Year Report. Prudential s most recent Annual Report, Form 20 F and any subsequent Half Year Report will be available on its website at Any forward-looking statements contained in this document speak only as of the date on which they are made. Prudential expressly disclaims any obligation to update any of the forward-looking statements contained in this document or any other forward-looking statements it may make, whether as a result of future events, new information or otherwise, except as required pursuant to the UK Prospectus Rules, the UK Listing Rules, the UK Disclosure and Transparency Rules, the Hong Kong Listing Rules, the SGX-ST Listing Rules or other applicable laws and regulations.

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20 Prudential public limited company Incorporated and registered in England and Wales Registered office Laurence Pountney Hill London EC4R 0HH Registered number Prudential plc is a holding company, subsidiaries of which are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority. All content correct as at December 2014.